Alright… the holiday season is underway and it’s likely that most of your expenses will be incurred in shopping and preparing for festive occasions. This however can become a barrier for the dream trip(s) planned for 2014, and you might just end up a bit short of the required budget – now that would be a bummer.
However, that dream trip to the Caribbean, Hawaii or the entire continent of Europe can easily come true with a realistic savings goal and an appropriate budget (even if you go off the line with a couple of hundreds in the last quarter).
And you would feel a sense of pride in knowing that the whole trip has been financed without requiring you to be in debt. Some of the ways to make this possible and save up in advance include:
1. A High Yield Savings Account
Rather than mixing up the savings for the vacation with your own personal money in a single account, which by the way makes you prone to being just short of the vacation budget, you can go ahead and open up a separate high yield savings account, which not only keeps the vacation funds separate, but also earns you interest that can go as high as 8%.
Many traditional banks will allow you to operate a high yield savings account online, so you can find a local bank to open a checking account and link that to the savings account. This gives you the added benefit of transferring funds immediately to the checking account if there’s immediate cash required in the case of an emergency.
2. Certificates of Deposit
Certificates of Deposit are another saving option available to you, and just like in case of high-yield savings accounts, you can move and access your funds seamlessly with an online account. Moreover, the federal government insures Certificates of Deposits, implying that if the bank isn’t able to pay depositors due to an unfortunate economic or natural turn of events, you won’t lose the money.
You’ll find that a CD that has a long maturity period will make more sense when saving up for a vacation than putting your money in a 3 month or 6 month CD. Also, if you manage to get the very best CD rates, you might even earn enough to pay for the vacation as well as some shopping beforehand. Learn about CD growth and safety with the preceding link.
3. Discounts and offers
While the plan is going to take place after several months, there’s no harm in searching up for discounts in advance. In fact, it’s actually a wise thing to do especially when you’re planning to go somewhere in the summer because location-specific discounts on attractions, dining and hostels run out quickly.
For example, if you don’t plan to spend too much money at the hotel and would rather enjoy outdoor attractions the location has to offer, you can look up Hostel Bookers or Hostel World to find discounted room rates. Hostels cost only a fraction of the price of conventional hotels and some even offer private rooms for families at reasonable rates, with added perks of free Airport pickup, free internet, etc. Likewise, you can search for restaurants, theme parks and shopping coupons online.
4. Create another source of income
Other than the interest you would be earning through the savings account, you can create additional sources of income. There are several ways to go about it, but you can start off with your current occupation by working a few additional hours. Although you might not be able to make much by giving 2-3 extra hours, the savings add up by the time you’re ready to leave.
However, if you’re a housewife or work at home, you can still earn additional money right from the comfort of your bed. This can be done through one of the thousands freelancing gigs available, which translate into good additional income (great if you’re an exceptional writer). You can even take up the role as a social media manager or sell items on eBay and Amazon.
5. Leave the funds alone
Don’t look at your savings account now and then, and let it fill up for a few months. If your peers take you to holiday parties and you have to pay to attend an event, consider the opportunity cost of the relaxation you’re going to enjoy in the summers.
It’s also easier to build up substantial amounts of savings when you don’t get overwhelmed about the amount prior to the vacation date. So just give a wide berth to it until the time comes and enjoy your success next year.
How do you save for a vacation? Feel free to leave comments.